European Competition Policy in Financial Services: Rules and Empirical Insights

This dissertation considers aspects of current EU competition policy and additional provisions of the Treaty on the Functioning of the European Union (TFEU) relevant for competition in the financial services sector. Primarily, it analyzes the application of Article 101(3) TFEU in the insurance sector. It argues that the traditional arguments that have been advanced by insurance associations to justify different treatment from EU competition rules have lost their relevance since they fail to recognize the similarities and an increasing convergence between the two sectors of the financial services industry. Therefore, insurance sector cannot be considered ‘peculiar’, at least vis-à-vis banking, and therefore, can no longer be treated as ‘sui generis’ for the application of EU competition law. Afterwards, it investigates the effectiveness of the harmonization measures in the sectors of insurance and banking at enhancing competition in the internal market. For this purpose, evidence is provided from Italy as a case study. Based on the analysis, concerns arise about the effectiveness of the harmonization process of non-life insurance services in Italy due to the fact that over the period 1998-2013, the level of competition did not remarkably improve but witnessed an unstable trend. Same concerns can be extended to the Italian banking sector. Further, findings suggest that competition in non-life insurance and banking sectors is not detrimental to financial soundness. Moreover, sounder insurers and banks benefit more from higher competition as compared to less sound counterparts.